The S&P 500 index (SPX) lost 14 points, or 1.4%, and closed at its lowest point since Nov. 4. The Nasdaq composite (COMP) fell 45 points, or 2%, and closed at its lowest point since Feb. 11.

Stocks seesawed through the morning before turning resoundingly lower in the afternoon. News that BP is capturing some of the flow of the oil leak seemed to give a lift to stocks early in the day. But any enthusiasm disappeared as the session wore on.

"This is more of what we've been seeing for weeks," said Brian Battle, vice president at Performance Trust Capital Partners. "We have a lot of uncertainty in the market, and when that happens, you take your chips off the table and wait."

He said that uncertainty surrounds the economic outlook, financial reform bill, solvency situation in Europe, fluctuating euro and upcoming mid-term elections in the U.S.

Stock declines last week left the Dow and S&P 500 at 4-month lows and the Nasdaq just above a 4-month low. A weaker-than-expected May jobs report and selling in the euro sparked Friday's declines.

"Last Friday's jobs report inspired very little confidence in terms of the economic recovery," said Erick Maronak, senior portfolio manager at Victory Capital Management. "Add to that the anxiety about Europe and investors are very skittish."

The biggest losers Friday were in tech, banking, transportation, retail and housing.

Market breadth was negative. On the New York Stock Exchange, losers beat winners seven to three on volume of 1.43 billion shares. On the Nasdaq, decliners topped advancers four to one on volume of 2.22 billion shares.

Euro: The euro continued to drop Monday, trading at $1.192 after touching a four-year low of $1.188. The dollar fell 0.2% against the yen.

Weakness in the euro tends to be seen as a proxy for worries about the European debt crisis and its impact on the global economy. Worries that the United States could be in danger of falling into a so-called double-dip recession have plagued markets for the last month, sending the major stock indexes down more than 10% each.

BP: Stocks had been primed for a higher open after BP said its current effort to stem the flow of oil from a leaking well in the Gulf of Mexico was working. The company said it collected 10,500 barrels of oil Saturday, and 16,600 barrels between Thursday and Saturday. The well is gushing at least 19,000 barrels a day.

After jumping in pre-market trade, BP stock traded with slim gains in the morning and flattened out in the afternoon. However, a number of other energy shares rose, including Exxon Mobil (XOM, Fortune 500) and Chevron (CVX, Fortune 500).

The rise in select energy shares helped temper the selling in the broad market, as energy is one of the biggest components of the S&P 500.

Apple: Chief executive Steve Jobs unveiled the iPhone 4 Monday at Apple's annual Worldwide Developers Conference in San Francisco. The newest version of the phone has around 100 new features, including a higher-resolution screen and a more industrial look.

Jobs was also expected to announce updates to Apple's Safari Web browser, iTunes, new Macs and a new Macintosh operating system. Nonetheless, Apple shares lost 2%, falling with the rest of the market.

Company news: In deal news, Spain's Grifols, a maker of blood-plasma products, said it is buying U.S.-based rival Talecris Biotherapeutics (TLCR) for about $3.4 billion. The deal gives Grifols roughly one-third of the U.S. market. Shares of Talecris rose 26%.

Economy: Federal Reserve chairman Ben Bernanke will answer questions about the economy at an event in Washington Monday night.

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